Tag Archives: Location

What Factors Should Be Considered Starting a 2nd Office? Three Considerations

Situation: A Silicon Valley company is considering starting a second office both to reduce costs and to diversify its geographic client base. What are best practices for starting your first remote office?

Advice from the CEOs:

  • Do you really need to have an office, or can your employees be virtual?
    • Look at your business model and what aspects of your business require an office. Within Silicon Valley, some companies have established local remote offices to enable staff to reduce commutes. These offices include full computer and audio-visual facilities so that remote office staff can participate in home office team meetings. There are an increasing number of cloud-based services that facilitate collaboration between widely distributed teams in different geographic areas. These include Go-to-Meeting, WebEx and Sococo. Can a model like this work for you? If so, then locating an office in a different region is not very different from a remote local office.
  • Outside of your current client base, what customer companies would you like to target?
    • Where are they located? Is there a significant geographic concentration of potential customers in other regions? This might tell you where you would want to put either a real or a virtual local office.
    • Locating an office in a location with numerous potential clients also increases the likelihood that you will find a trained and experienced local talent pool to staff your office.
  • Make sure that you analyze and understand your business model and what portions are exportable.
    • What is your culture and how much does it rely on interaction between home office and consultant staff? Avoid a situation where remote staff feel 2nd class.
    • The solution is to fully understand your model, and to manage both local and remote office staff through the model. Make it simple to monitor people and their activities.

Key Words: Office, Remote, Virtual, Business Model, Collaboration, Technology, Customer, Location, Contractor, Culture

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Opening a Branch Office – Five Preparatory Analyses

Situation: The Company plans to open their first branch office. There are considering several possible locations. What are the most important considerations as they prepare?

Advice from the CEOs:

  • Perform an ROI analysis for the planned office. How is the ROI for the branch office different from your primary office? Look for potential economies of scale in your business model. This may prompt a rethinking of how you generate your products or services.
  • Simultaneously, look at your potential costs per location and the level of business required to (1) break even and (2) to match/exceed home office return in the new location. As you consider different geographical locations, compare costs and potential contribution of each against the others.
  • Decide whether you need to build full operations in your branch offices, or whether you can use a distributed services model, working from a central hub that performs some operations that need not be replicated in the branch offices.
  • Once you have completed these three analyses, perform a make/buy analysis to determine whether you get a better return from setting up your own office or purchasing a local company, if one exists.
  • Lower risk by starting with a relatively low cost operation – essentially a satellite office with minimal staff. As the new office develops initial business, they can be supported by your home office operations. They will serve as local feet on the street to evaluate the true potential and local barriers to entry within the new market.

Key Words: Branch Office, Location, ROI, Economies of Scale, Make/Buy, Barriers to Entry       [like]

Great Deal on a New Space . . . Now We Must Move! Five Recommendations

Situation: The Company has taken advantage of favorable lease rates to secure a larger space. How can they minimize work flow disruption during the move?

Advice from the CEOs:

  • Plan the move in detail: electrical, intranet and telephone needs; office space and facilities; design or production space and facilities.
    • If you can’t move everything over a short period of time – a 3-day weekend – consider moving in steps – a series of discrete moves over time, each with its own requirements and timetable.
  • If you carry inventory, pre-build inventory to see you through critical steps of the move.
    • If you have a major customer with strict delivery deadlines, try to negotiate a delivery window during which you can conduct the move.
    • Determine if there is seasonality to order delivery that makes a particular time of year more convenient to move critical operations.
    • Custom work will require special planning.
  • If you plan to upgrade equipment, consider purchasing, installing and operating the new equipment in the new location instead of your existing location.
  • If you will be leasing the new facilities – maybe even if you are purchasing – ask the new lesser or seller to provide cash to:
    • Finance delayed shipments at a price discount,
    • Cover expenses of the move and outfitting the new location to your needs.
  • Consider converting to a wireless intranet and telephone system to avoid the expense of wiring the new facility.
    • Look at plug and go options.

Key Words: Planning, Location, Work Flow, Inventory, Technology, Customer Service, Logistics  [like]